Enterprising for Zero Hunger

Big purchasing companies could support smallholder farmers to increase productivity and get out of poverty, but new skill sets and high levels of accountability are needed.

Smallholder farmers produce the lion’s share of the global food supply and need to be at the centre of solutions aimed at achieving the UN Sustainable Development Goal (SDG) of ‘Zero ´Hunger’ by 2030. And given the fast growing world population, realization of the zero vision will depend on increased agricultural productivity and investments, while ensuring sustainable supply chains and respect for human rights and the environment. These were the core messages at the ‘Zero Hunger in a Changing Climate’ development talks at Sida in Stockholm, last week.

The role of big agri-businesses was brought up during the discussions. In many developing countries governments do not invest sufficiently in support to smallholders – for example in training and productivity improvements, agricultural credits, marketing, and infrastructure. As a consequence many farmers experience challenges such as low yields, household poverty and malnutrition. In the absence of government investments, big purchasing companies are increasingly becoming important actors in poor rural areas.

Swedwatch sees the positive potential of private sector in contributing to poverty alleviation and sustainable development in rural areas. At the same time, companies should be aware that new skill sets, and high levels of accountability and responsibility will be needed in order to prevent negative impacts in often complex operating environments. After the seminar Swedwatch interviewed the key note speaker Bernard Giraud, President of the agricultural investment initiative ‘Livelihoods Venture’*, about his views and experiences.

What is the role of large agriculture companies and investors in securing global food security in line with the SDG two; ending hunger?

If you want to change big things you need to work with big actors. Companies, which purchase agricultural raw materials such as dairy, vegetables, grains, or meat, can play an important role in improving livelihoods for smallholder farmers. They are not direct actors working side by side with farmers, but because they buy and process agricultural products they can exert tremendous influence through negotiating and partnering with suppliers and sub-suppliers to support the development of sustainable farming models and practices. A company which sets high standards and purchases materials, which are grown sustainably with benefits for farmers, can provide strong leverage for positive change.

Responsible investors in agricultural projects can also have positive influence on factors beyond the farm such as the local environment, and poverty levels in the surrounding communities. Such integrated projects can improve farming practices and increase productivity for thousands of farmers, and at the same time contribute to protecting and restoring local groundwater levels and forests and decreasing the carbon footprint of the production.

What advice do you have to companies and investors, which are part of global agricultural supply chains?

Companies that purchase agricultural raw materials need to have an in-depth understanding of the small-holder farmers in their supply chains. For example, what are the socio-economic conditions of the farmers, their families and their communities? What benefits and challenges do they experience in commercial farming? What are the major stakes for the environment?

For traceability purposes, companies should map out the geographical origin of each agricultural raw material in their supply chain. It is a necessary, but not always easy task, to map the flow through many intermediaries and processors.

Once they have a precise understanding, the company should identify the levers and entry points where they can have a role to improve the situation for small-scale farmers.

This could of course be about increasing the revenue for farmers, both in terms of fair prices and in terms of increasing the productivity at the farm level, or improving working conditions. But companies also have to look beyond the fence of the farm, beyond the commodity itself, and take a 360 degrees approach – a landscape and community approach to farming. In partnering with NGOs and governments, companies could contribute to improved water resources or forest management in their supply chain areas, and they can also influence the availability and quality of nutritious food for farmers’ families. The key is to ensure that farmers have enough cash income from commercial agriculture, while at the same time having access to enough nutritious food for their families.

Mapping of supply chains and working directly with farmers and their organisations seems like demanding tasks. How much can we reasonably expect from companies in these areas?

Companies should see the limitations to their own capacity. Most companies today are not necessarily equipped with the proper skill sets to face challenges such as design of agricultural projects in complex environments with poor farmers. And they may not be ready to face the realities of slow rates of return, which are often a reality. Here companies need to be in for the long haul and be equipped with patience needed and the right expectations. The answer to these challenges is partnerships, such as those supported through the Livelihoods Fund for Family Farming. The Fund provides a platform where companies partners up with NGOs who are specialised in designing and implementing integrated agriculture projects with multiple benefits for farmers and communities. The platform also brings in experts from academia, and professionals who can broker constructive partnerships and cooperation between government and companies.

How can we make sure that companies are transparent and held accountable for their impacts on farmers and the surrounding community, both as regards positive benefits and negative impacts?

Of course companies must be held at the same level of accountability as governments and NGO’s. Traceability of materials, and clear goals and indicators for performance need to be established, against which companies can measure and publish their performance and improvements.

Companies and projects cannot deal with everything, everywhere, so we must identify the key challenges and the key levels for improvement in a certain area. What are the main economic, social, environmental goals of the project? What do we want to achieve? How productivity can be increased at farm level? What will be the social impacts of the project? Are water resources the top priority in this area? Or is it biodiversity, soil degradation, food security? Etc.

Then we need metrics to measure this. What are the social, environmental indicators? We have to decide where should we put our efforts and how do we measure if there has been adequate results.

Through the identification of key challenges, key levels of improvement, and collaboration of Governments, NGO’s and companies, big actors wil l be able to contribute to a positive change within food production and smallholders?

Are you optimistic about the future – will agriculture companies, together with partners, be able to create positive change for smallholder farmers?

We have to remember the conditions in factories fifty years ago. There has been tremendous improvements in working conditions and standards since then, often resulting from cooperation between NGOs, trade unions and companies. Now the same improvement process has begun for companies’ agricultural supply chains. A lot has happened in the last ten years, companies and NGOs are learning to work together and how to work with farmers and their local organizations to effect real change.

* ‘Livelihoods Venture’ is a social business that manages Livelihoods Fund for Family Farming, an investment fund with private sector investors, in particular large food companies.